Violation of duty of care affects exoneration

In a dispute about invoking an exoneration clause in the franchise agreement by the franchisor, it was considered that the nature of the franchise agreement and the ensuing duty of care of the franchisor to provide continuous support and assistance to the franchisee should be taken into account. The District Court of East Brabant concluded this in its judgment of 23 April 2014, ECLI:NL:RBOBR:2014:2305 (X/Bodique).

The court considered that an appeal on an exoneration clause cannot succeed if the damage is due to intent or willful recklessness (or of persons charged with the management of his company) of the person making the appeal. In particular, it will have to be taken into account how reprehensible the omission that should lead to liability has been, what the consequences of this omission are and to what extent the resulting damage is possibly covered by insurance. In assessing whether this criterion is met in this case, the nature of the franchise agreement and the resulting duty of care of the franchisor to provide ongoing support and assistance to the franchisee must also be taken into account, according to the court.

The court ruled that in the present case the shortcomings found did not show such reprehensibility or deliberate recklessness that her appeal to the franchisor’s exoneration clause was unacceptable according to standards of reasonableness and fairness. Nor had it been shown that the franchisor had breached its duty of care during the franchise agreement.

The court also notes that in this case no prognosis was provided by the franchisor prior to the conclusion of the franchise agreement, whereby the court apparently intended to indicate that there is no question of whether the franchisor violated a pre-contractual duty of care. would have. The court indicates that the disappointing results of the franchisee are due to disappointing visitor numbers and/or higher costs than anticipated, which are at the expense and risk of the franchisee.

The importance of this judgment lies in the fact that the nature of the franchise agreement and the ensuing duty of care of the franchisor, an appeal to the non-application of an exoneration clause by the franchisee seems more likely to succeed than in other contractual relationships. . On the other hand, failure to (properly) comply with the duty of care by the franchisor can have far-reaching consequences for the validity of an appeal on an exoneration clause, in the sense that one appeal on an exoneration clause could be rather unacceptable.

Mr AW Dolphin  – Franchise attorney

Ludwig & Van Dam Franchise attorneys, franchise legal advice.

Do you want to respond? Mail to dolphijn@ludwigvandam.nl